A Lesson in Tax Tables for Payroll Departments

by Damon Callihan | August 5, 2017 9:05 am


Does your small business still handle payroll in-house? If so, what is the most aggravating part of doing so? A lot of in-house payroll departments would say they struggle to keep up with federal and state taxes. If you would agree, rest assured that your payroll department is not alone. Dallas-based BenefitMall says that keeping up with tax compliance is one of the key factors that drives small businesses to turn to them for payroll and benefits administration.

Federal and state tax issues are nothing new. No matter where a company is located, every year seems to bring some sort of change to federal and state tax codes. Some of those changes can be rather complex, as employers in Kansas are now finding out. The Kansas Department of Revenue just issued new tax tables thanks to recently passed legislation that increases individual income tax rates and reinstates previously eliminated taxes for sole proprietors and LLCs.

Media outlets in the Sunflower State are encouraging workers to check their pay stubs over the next several pay cycles to ensure the correct amount of state tax is being withheld. According to the Garden City Telegram[1], there is a problem with the new tax tables inasmuch as the state does not go out of its way to inform employers of their existence. They simply update the tables, put the new editions online, and expect employers to go get them on their own.

Placing the responsibility on employers is not necessarily a bad idea as long as those employers are paying attention to what the state legislature is doing. But what are the chances that every small business owner is paying attention? Slim to none. So now there are likely some small and medium-sized businesses not withholding enough tax because they are not using the updated tax tables. The end result will be taxpayers who find they owe significant amounts of money at the end of the year.

Making matters worse is the fact that the higher taxes are retroactive to January 1. That means employers will effectively be collecting twice the amount of the increase in order to make up for the fact that they have not been withholding enough through the first half of the year. Workers whose employers are not using the new tax tables could find themselves in a world of hurt come tax time.

So what are employers to do if they cannot keep up with changes in federal and state tax laws? BenefitMall says that one very good option is to contract with a payroll service provider. As one of the nation’s leading such providers, BenefitMall assumes the responsibility of ensuring taxes are properly withheld and paid. They make it their business to pay attention to what federal and state governments are doing so as to never leave their clients in a lurch.

Contracting payroll to a third-party provider like BenefitMall[2] also alleviates much of the pressure that goes along with regular payroll processing. Clients still need to pay attention to some degree (to hold their payroll providers accountable) but the amount of time they have to spend on making sure payroll is done correctly is drastically reduced. A reputable company like BenefitMall can take all the worry and hassle out of payroll.

The state of Kansas has retroactively increased taxes on workers and updated their tax tables. Here’s hoping that every employer in the state fulfills its obligations to deduct and submit the right amount for each employee. Otherwise, a big mess awaits.

  1. Garden City Telegram: http://www.gctelegram.com/news/20170730/higher-tax-rates-bring-changes-to-state-withholding
  2. BenefitMall: http://employers.benefitmall.com/

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